Rental investment has long been one of the favorite investments for many people. In spite of complex regulation (framing of rents, increase of the taxes), still so many people turn towards this type of investment. It remains an excellent way to build a heritage provided that you follow certain good practices.
Define your objectives
To succeed in your investment, you must first determine your main objectives. What is the purpose of your investment: is it for your children, a second home, a wealth creation strategy or a way to reduce taxes
You must also define the type of rental you want to set up
seasonal rental or student rental or furnished rental. For this reason, choose a property that corresponds to your expectations. The layout of the property and its condition are elements to bear in mind at the time of acquisition, because once purchased, this property should be maintained regularly. Most of the work is the responsibility of the owners.
Choose carefully the location of your rental investment
To achieve a strategic rental investment, one of the most important points is the location. It is necessary to turn to an attractive city gathering factors such as work, many schools and a good reputation. For a small-scale rental investment, which mainly concerns students and young workers, the proximity of universities or public transport, are convincing criteria. We also invite you to study the future potential of the site in question, and try to look into 10 or 20 years to analyze the variation in demand.
Calculate the optimal rent
The price of rent must be calculated carefully because it will have a strong influence on the performance of your property as well as demand. To calculate the rental price several solutions are possible. Call a professional who will determine the most suitable price on the market. Study the benchmark rent index.
Consider the potential for improving the profitability of housing
Studying the potential rent and the future rent is a crucial step in the investment. The potential rent is the rent that can be obtained after some work. The future rent corresponds to the supposed progression of the property. After careful consideration of profitability, if it exceeds 3-4%, you can consider the investment as profitable.
There’s A Lot More
These are just some of the factors to consider when purchasing an investment property. For more help on investment, talk to Precept Financial Services today.